The right retirement plan for tax-advantaged savings
RRSP and TFSA are both a savings plan for your retirement that gives you a tax break, allowing you to use all your savings as you need. Where RRSP was an existing traditional option, TFSA is a new introduction by the Government of Canada, having its own unique advantages.
Both RRSP and TFSA offer tax benefits on your retirement funds and enable you to grow your money over time by investing in various assets like stocks, bonds, ETFs, and other available options. While both are effective retirement plans, they have some important distinctions that can make one of them more suited for some of your goals and income levels than the other, depending on how you choose to save. However, there is no restriction and you can choose to include either a TFSA or an RRSP, or both.
Let’s understand both individually with the unique essential factors to consider while deciding which option is best for you.